tax time accounting questions....

[Miss Maya Blue]

i have a few questions for the accountants on the board

is there any reason why I should not tell an accountant that I am an escort?

and a question for the girls on the board
does anyone know of a good SP friendly accountant?

 

[David450]

You need to tell them so as they know your sources of income and can asess what legitimate expenses you may claim against that income.
Presumably you sell your Art and claim your costs in order to produce the Art and to sell the Art. It's really no different other than I enjoy sex more than Art.

 

[roxyfan]

I am CA responding to this. Why the #$% would you be telling an accountant you are an SP? Any of us that have professional designations...such as myself would not want to deal with anyone involved in a cash based business let alone an SP. Too much liability issues now that CRA has put on us.

My advice. Put the cash into a safety deposit box and dont tell the govt anything. You work really hard for this moeny - you should get to keep it.

 

[Joe Cool]

You should be completely honest with your accountant.

An escort can be completely legal and pay far less tax than she thinks she would have to.

I can recommend an accountant who looked after some high profile women.

 

[Miss Maya Blue]

~

joe cool
thanks for the offer
could you email their info please and thanks?

 

[oldjones]

I am CA responding to this. Why the #$% would you be telling an accountant you are an SP? Any of us that have professional designations...such as myself would not want to deal with anyone involved in a cash based business let alone an SP. Too much liability issues now that CRA has put on us.

My advice. Put the cash into a safety deposit box and dont tell the govt anything. You work really hard for this moeny - you should get to keep it.

Yeah, there's no liability in concealing your income from the government. Good advice. [insert sarcastic smiley] You'll note Maya that roxyfan's answer is all about him; one wonders why he's in his profession, poor baby, facing what he faces. Probably just his time of the year.

As for your profession, it's not illegal and produces an income; that's reportable and taxable. In spite of the difficulties it may make for accountants—who only exist to deal with it—cash is legal too. In fact people who write about tax law seem to enjoy citing cases of madames and such as examples to prove that we all owe taxes and that honesty is the best policy, if not the short-term cheapest. Go with Joe.

 

[alan9080]

I am CA responding to this. Why the #$% would you be telling an accountant you are an SP? Any of us that have professional designations...such as myself would not want to deal with anyone involved in a cash based business let alone an SP. Too much liability issues now that CRA has put on us.

My advice. Put the cash into a safety deposit box and dont tell the govt anything. You work really hard for this moeny - you should get to keep it.

I wonder what the CICA would have to say about your advice.
I hope you dont give all your clients this type of advice or your designation
could be taken away.

 

[fuji]

I don't think it would do any harm to tell your accountant that you are an SP. On the other hand, you can probably be a little vague about it and still get your taxes done properly.

 

[Incall]

He will most likely charge you around 400.00 dollars an hour or two hours at 700.00 dollars?

 

[scrooge]

Profits from a business, even if illegal, are taxable just like ordinary income. Your question is very similar to "I have a cash business. Is there any reason not to tell the accountant that fact?"

The answer depends on whether you want to report 100% of your income. If you do, then it does not matter and your accountant should know how to report such income to be from a "business". There is no harm as Fuji said.

However, if you do not want to report 100% of your income, then you should not tell your accountant a whole lot. If the accountant helps you with the taxes knowing you have undeclared income, there could be severe civil penalties on the accountant.

Remember, the accountant's job is to put onto that tax return what you tell him/her.

 

[blopar]

Oldjones is 100% correct.

 

[Aardvark154]

Profits from a business, even if illegal, are taxable just like ordinary income. Your question is very similar to "I have a cash business. Is there any reason not to tell the accountant that fact?"

The answer depends on whether you want to report 100% of your income. If you do, then it does not matter and your accountant should know how to report such income to be from a "business". There is no harm as Fuji said.

However, if you do not want to report 100% of your income, then you should not tell your accountant a whole lot. If the accountant helps you with the taxes knowing you have undeclared income, there could be severe civil penalties on the accountant.

Remember, the accountant's job is to put onto that tax return what you tell him/her.

Of course if you don't report 100% of your cash income (or close enough to it that it can be plausibly argued that the difference was due to a mistake) you can be prosecuted by the Crown for Income Tax evasion. Remember to that in the U.S. Al Capone was never convicted of either racketeering or conspiracy charges, but was sentenced to 11 years imprisonment for Income Tax Evasion.

 

[wonkyknee]

Whether you tell your accountant is one point, whether you file as an escort is another.

If you file as an escort, then if/when you are reviewed as an escort then you may be subject to lifestyle vs income questions. This happens in all cash businesses.

But what choice do you have? If you file as an escort and you own a home and a care and investments, and your credit card bill averages $3000/month, then you will be subject to serious questioning.

If you file as an escort pay everything(most things) in cash, save your money in your mattress, then there will be no questions if you declare $10 000 - $15 000/year.

Bottom line, whatever you file should come close to representing your lifestyle

 

[earl]

Paying the bill

This reminds me of a great story in my office. My Partner had a client who was a madam. She asked how he would like to be paid for preparing her tax return, he said a cheque will be fine.

You don't have to say you are an escort. You can say you are self-employed in the art field, its all about the numbers. You should report some income and expenses, because the government does not like people living a nice lifestyle and reporting very little income.

Your expenses will include advertising, cell phone, auto, supplies, ect. And just in case you get audited, keep your reciepts.

In my experience, the more the accountant knows about the person, the better job he can do for them. Knowing your client is important and trust is too.

 

[drrogers]

Your a CA?

I am CA responding to this. Why the #$% would you be telling an accountant you are an SP? Any of us that have professional designations...such as myself would not want to deal with anyone involved in a cash based business let alone an SP. Too much liability issues now that CRA has put on us.

My advice. Put the cash into a safety deposit box and dont tell the govt anything. You work really hard for this moeny - you should get to keep it.

How can you give this advice - with all due respects are all your clients non-profit religious organisations. How can you council her this - on one hand you want nothing to do with her and on the other hand you're counselling her to commit tax evasion. Get down from your high horse - she is trying to be honest. What she does is not against the law and she wants to act responsibly. Did you divest yourself of all tradespeople that are notorious for working for cash, how about that moonlighting TTC driver - he's not your cup of tea either and I guess a restaurant server should bury their $200 a night tips in the backyard. It was guys like you that I worked with that helped me to decide to give up my practice and do something useful. Maya, speak to some of your clients that are CA's I'm sure they will be anxious to help you out.